Siam City Cement Reports Strong H1 2024 Performance, Paying Interim Dividend of 4 Baht per Share

He discussed the key initiatives that have driven the company's 55-year success in the region.

"The impressive growth in H1 was the result of SCCC’s strong strategy adaptability, particularly its flagship project FIT+ (People, Profit, Planet), which has been implemented across all business units to improve topline and operational efficiencies since Q1 2024 and is beginning to deliver results all around." Sachdeva explained.

As a result, for the six-month period ending 30 June 2024, SCCC Group recorded a remarkable 36% increase in EBITDA and a 44% rise in net profit compared to the same period in 2023. 

Primarily, this growth was also driven by reduced energy costs, improved operational efficiencies, and strategic restructuring efforts that lowered fixed costs, leading to a significant improvement in operating margins from H1/2023. 

The Group’s overseas operations in Vietnam and Sri Lanka saw increased cement sales and operating profits amid market recovery in these regions.

The Group CEO also highlighted that, given this strong performance, the Board of Directors recently approved an interim dividend of 4 baht/share. Enhanced net working capital and cash flows further strengthen SCCC’s capacity to invest in new projects and maintain existing assets. The Company also settled maturing debentures (4.5 billion baht) in H1 using internal cash accruals.

"Our success is due to our ability to adapt quickly to changing market conditions and focus on sustainable growth. Additionally, we have best-in-class risk management and governance frameworks, and financial guiderails to ensure we stay on track," he explained.

He further shared the key performance highlights and business outlook for the three countries that contribute to over 95% of SCCC’s business: Thailand, Vietnam, and Sri Lanka.

Thailand: Thailand is our primary market for cement, and we also have significant operations in Ready Mix and Aggregates, Waste Management and Industrial Services, and Light Building Materials.

Despite lower demand in H1 due to the delayed approval of the government budget and continued high household debt, all Thai businesses outperformed H1/2023. We introduced new low-carbon cements, such as Blue Globe Cement and INSEE Petch Ngarn Thang Luang, which have been well received in the market. As a result, 80% of the cement sold in Thailand in H1/2024 was low carbon, up from 59% in 2020, demonstrating our commitment to sustainability and reducing our carbon footprint.

Looking ahead to H2, the construction market in Thailand is expected to accelerate, fueled by the recently released government budget. Despite facing challenges such as intense competition, high household debt, and lower loan disbursements, the market remains resilient and holds promising opportunities for SCCC's businesses in Thailand.

Vietnam: The Vietnamese market demonstrated strong growth, with EBITDA increasing by 67% year-on-year. This remarkable performance by Siam City Cement Vietnam was driven by our efforts to capture a larger market share amidst rising demand, fueled by substantial public investment in infrastructure projects and an effective market penetration strategy. Vietnam has consistently achieved 100% low-carbon cement sales since 2020.

In H2 2024, the Vietnamese market is expected to continue its positive trajectory, with a rapid recovery in bulk cement demand anticipated. This recovery will be driven by major government infrastructure projects, such as Long Thanh Airport and the development of expressways in the Central and Southern regions. 

Sri Lanka: Sri Lanka’s economy is recovering, supported by positive macroeconomic indicators and actions by the IMF.

We have observed the strengthening and stabilization of the Lankan rupee, along with reductions in interest rates and inflation. These improvements, coupled with the IMF's financial aid packages and policy reforms, have boosted investor confidence and market liquidity, creating a favorable business environment for SCCC.

Siam City Cement Lanka reported a 172% year-on-year increase in EBITDA, driven by significant restructuring efforts in 2023. In the first half of 2024, 100% of the cement sold in Sri Lanka was low carbon.

Strategic Initiatives
In addition to FIT+ projects, SCCC continues reinforcing the Company's commitment to meet its Environmental, Social, and Governance (ESG) goals, through higher people engagement and continued emphasis on capability building and ensuring a talent pipeline for succession, so that SCCC Group is well-prepared for the future challenges.

"We remain steadfast in our commitment to ESG, with 89% of our cement sales in H1/2024 derived from low-carbon cement products, reduction of coal consumption by using more alternative fuels, and accelerating the use of renewable energy.” Sachdeva emphasised.

The establishment of a new subsidiary, INSEE B.Grimm Solar Company Limited, in partnership with B.Grimm Power, marks a significant step towards expanding renewable energy use. The Company is on track to commission an 83 MW solar energy project for captive use in Thailand by Q3/2025, with a similar project in Sri Lanka expected to commence commercial operations of 10 MW in 2025.

Outlook 
Looking ahead, SCCC remains cautiously optimistic about the outlook for the remainder of 2024.

Demonstrating resilience and adaptability in a dynamic business environment, SCCC continues to lead the way. 

“With a focus on strategic initiatives, sustainability, and operational efficiencies, SCCC Group is well-positioned for continued growth and delivering above industry average shareholder returns,” concluded the Group CEO.